* U.S. non-farm payrolls drop in December * Dollar weakens after jobs report NEW YORK, Jan 8 (Reuters) - U.S. crude oil futures slipped on Friday after a report showed U.S. non-farm payrolls fell in December against expectations for payrolls to have stayed steady. Crude futures trading was choppy. Sources said the dollar's weakness after the jobs report limited losses for crude. U.S. employers unexpectedly cut 85,000 jobs in December, cooling optimism on the labor market's recovery. The Labor Department said November payrolls were revised to show the economy added 4,000 jobs rather than losing 11,000 as initially reported. [ID:nN0747110] With revisions to October, however, the economy lost 1,000 more jobs than previously estimated over the two months. "The Labor department's report has done nothing to dispel my skepticism that a sustainable recovery is underway," said Mike Fitzpatrick, vice president at MF Global in New York. The U.S. dollar fell after the jobs report dented optimism about U.S. economic prospects and curbed expectations interest rates will rise soon. [USD/] "While the employment data point was below consensus, the trend in employment is improving with the overall economy. While the recent rally in oil prices may not be furthered, for now, they will be sustained, the data is good enough," said John Kilduff, partner at Round Earth Capital in New York. In addition to expectations of more demand from a global economic recovery, oil prices had been lifted recently by cold temperatures blanketing much of the Northern hemisphere. [WEA] Private forecaster DTN Meteorlogix said Friday a major arctic outbreak across the central and eastern U.S. during the next few days will begin to wane later Sunday, though another surge of cold air may move into far northeastern areas of the nation Tuesday into Thursday. [ID:nDTN027] PRICES * On the New York Mercantile Exchange at 10:03 a.m. EST (1503 GMT), February crude CLG0 was down 45 cents, or 0.54 percent, at $82.21 a barrel, trading from $81.80 to $82.84. * In London, February Brent crude LCOG0 fell 45 cents, or 0.55 percent, to $81.06 a barrel, trading from $80.59 to $81.56. * NYMEX February RBOB RBG0 was down 0.66 cent, or 0.31 percent, to $2.1283 a gallon, trading from $2.1162 to $2.14. * NYMEX February heating oil HOG0 fell 0.77 cent, or 0.35 percent, to $2.1759 a gallon, trading $2.1587 to $2.19. * The February/February heating oil crack spread <0#CL-HO=R> was at $9.07 after ending at $9.05 on Thursday. The February/February RBOB crack spread <0#RB-CL=R> was at $7.10 after ending at $7.01 on Thursday. * The spread between the current front month and the five-year forward crude contract CLc61 was at $12.69, based on the February 2015 contract Thursday settlement at $94.90. The spread ended Thursday at $12.44. MARKET NEWS * Wall Street fell at the open on Friday after after the report showing an unexpected decline in non-farm payrolls in December. [.N] * Belarus will send a delegation to Russia on Saturday in the latest attempt to settle an oil-fee dispute that has raised European concerns about oil flow disruptions. [ID:nLDE6071GS] (Reporting by Robert Gibbons; Editing by John Picinich)

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